Turkey Economic Forecast

Turkey Economic Outlook

May 10, 2022

The economic panorama deteriorated in the first quarter of 2021, a trend which continues into the second. Industrial output moderated on average in January–February, retail sales growth moderated notably through February, and the manufacturing PMI fell into contractionary territory in March amid the war in Ukraine. Inflation ballooned as the conflict drove up commodity prices. This will have a notable impact on household spending as purchasing power is diminished. Moreover, as producer price inflation skyrocketed through March, the worst is likely yet to come as companies pass costs to consumers. Downbeat consumer sentiment through April will further dent spending. More positively, business confidence rose to a seven-month high in April on the back of rosier expectations. The manufacturing sector’s capacity utilization rate rose to a four-month high in the same month.

Turkey Economic Growth

Economic growth will decelerate this year amid the fallout from the Russia-Ukraine war, and the balance of risks is clearly skewed to the downside. Red-hot inflation will erode purchasing power, curbing real wage gains. An unstable currency amid unorthodox economic and monetary policies poses a further risk. That said, a tighter labor market should support consumption. FocusEconomics Consensus Forecast panelists project the economy to expand 2.9% in 2022, which is down 0.1 percentage points from last month, and 3.4% in 2023.

Turkey Economy Data

2015 2016 2017 2018 2019
Population (million)78.779.880.882.083.0
GDP per capita (USD)10,89810,80510,5569,3849,078
GDP (USD bn)858862853770754
Economic Growth (GDP, annual variation in %)
Domestic Demand (annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
Unemployment Rate10.310.910.911.013.7
Fiscal Balance (% of GDP)-1.0-1.1-1.5-2.0-2.9
Public Debt (% of GDP)27.528.228.230.433.1
Money (annual variation in %)17.417.615.519.426.6
Inflation Rate (CPI, annual variation in %, eop)8.88.511.920.311.8
Inflation Rate (CPI, annual variation in %)7.77.811.116.315.2
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)7.508.008.0024.0012.00
Stock Market (annual variation in %)-  -  -  -  -  
Exchange Rate (vs USD)2.923.533.795.295.95
Exchange Rate (vs USD, aop)2.733.023.654.845.68
Current Account (% of GDP)-3.2-3.1-4.8-2.71.2
Current Account Balance (USD bn)-27.3-26.9-40.6-20.88.7
Trade Balance (USD billion)-49.0-39.9-58.6-40.8-16.7
Exports (USD billion)155153169179182
Imports (USD billion)204193228220199
Exports (annual variation in %)-10.6-1.410.85.71.9
Imports (annual variation in %)-15.0-5.518.3-3.6-9.4
International Reserves (USD)92.992.184.272.978.6
External Debt (% of GDP)46.647.453.357.758.0

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Turkey Facts

Value Change Date
Bond Yield12.00-0.09 %Dec 31
Exchange Rate5.95-0.85 %Jan 01

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